AGRICULTURAL CONFERENCE AND FARM
BOARD INQUIRY

TUESDAY, NOVEMBER 24, 1931

UNITED STATES SENATE,

COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D. C.

The committee met, pursuant to call, at 10.30 a. m. in the committee's hearing room in the Senate Office Building, Senator Charles L. McNary presiding.

Present: Senators McNary (chairman), Norris, Capper, Norbeck, Frazier, Thomas of Idaho, Townsend, Walcott, Kendrick, Wheeler, Thomas of Oklahoma.

Present also: Senators Brookhart, Dickinson, Gore, and Connally; Representatives Jones, Mope, and Selvig.

The CHAIRMAN. The committee will come to order, and I ask for quiet in the room. I think I should make this brief observation: Í realize that we will have a busy session of Congress, which convenes on the 7th of December, and that but little time will be given to the committee to consider any of the problems over which it has jurisdiction between that time and the holidays. Hence, in order properly to study the question at all in its phases, I think it well to follow the precedent established last year by the chairman, in calling the committee together prior to the day of the opening of the general session of Congress.

I have notified all of the members of the committee, and have had their cordial cooperation in this move of my own. They are not all present to-day, and I must remind you that we have four vacancies on the committee, which can not be filled until Congress convenes. There are one or two necessarily absent, and one or two more will be present a little later on.

I have asked the Secretary of Agriculture to be present, and he is unable to be present at this time on account of a meeting of the Cabinet, but he will come later.

I have notified the members of the Farm Board, the heads of the three great agricultural organizations-the Grange, the American Farm Bureau Federation, and the Farmers' Union-to tell us what they have in mind in order that Congress may be able, if possible, effectively to solve the farm problem and to let us know what is the attitude of themselves and their associates regarding the present marketing act, either affecting its repeal or its modification or shall we go forward as we have for the last two years.

.Of course, the chairman of this committee could not reach every group and conclude the hearings within a reasonable time. Furthermore, this hearing may develop the necessity for a special committee to be appointed to consider the agricultural problem. There has been some discussion that a committee should be appointed rigorously to pursue the work of the Farm Board. That may or may not develop. In any event, whatever we obtain from these, I might call informal sessions of the committee, will be interesting to the public, and I think it will be of value to the agriculturists of the country.

There are some to be present whose names have been given to the chairman by other members. I have not attempted to bring those here who are wholly in sympathy with the Farm Board or the marketing act. I have invited anyone to express his opinion who is opposed to the actions of the Farm Board or who desires a repeal of the marketing act.

With that statement, which I think generally covers in a brief way the views of the chairman of the committee, I will call as the first witness the chairman of the Federal Farm Board, Mr. Stone.

STATEMENT OF JAMES C. STONE, CHAIRMAN FEDERAL FARM BOARD, WASHINGTON, D. C.

The CHAIRMAN. Mr. Stone, conformable to statute and practice, the Federal Farm Board only makes a report to Congress concerning the activities of the various boards and commissions authorized by law.

Mr. STONE. Yes, sir.

The CHAIRMAN. Have you and your board prepared a report to Congress for this session?"

Mr. STONE. We have.

The CHAIRMAN. Has it been printed?

Mr. STONE. Yes.

The CHAIRMAN. Have you that report in your possession?

Mr. STONE. I have a copy of it here, Mr. Chairman.

The CHAIRMAN. I should like, Mr. Stone, to have this report released and made a part of the record of our hearings, as an addenda to our proceedings.

Mr. STONE. Very well. I furnish it.

(A copy of the second annual report of the Federal Farm Board for the year ending June 30, 1931, was handed to the reporter and, per instructions of the chairman of the committee, will be printed as an addenda to the proceedings of the committee.)

The CHAIRMAN. Mr. Stone, is the membership of the board completed according to statute?

Mr. STONE. No; we lack one member, Mr. Chairman, of having a complete board.

The CHAIRMAN. What commodity is he supposed to represent? Mr. STONE. Wheat.

The CHAIRMAN. How long has that vacancy in the board existed? Mr. STONE. Since last June.

The CHAIRMAN. I want to ask you a few questions as to the situation in respect to the wheat that has been acquired by the board

during your stabilization operations. What was the maximum acquired by the board, and during what period of time did you operate?

Mr. STONE. The maximum, do you mean, on the 1st of July? Is that your question?

Senator NORRIS. Mr. Chairman, I can not hear the witness. Might he go to the end of the table?

The CHAIRMAN. Senator Norris, these 20 or more newspaper reporters have requested that he might be opposite them, where he is. Senator NORRIS. All right.

The CHAIRMAN. You may proceed to answer, Mr. Stone.

Mr. STONE. The total amount of purchases made by the Stabilization Corporation was 329,641,052 bushels. The total amount owned on the 1st day of last July was 257,136,571 bushels. That was all cash wheat.

The CHAIRMAN. What is the amount of wheat the board now has on hand, and where is it stored?

Mr. STONE. The total amount it has on hand now is-do you want just approximate figures, Mr. Chairman?

The CHAIRMAN. As accurately as you can give them.

Mr. STONE. I can give it within a million bushels.

The CHAIRMAN. All right.

Mr. STONE. It is approximately 189,000,000 bushels, or, to get a little closer, one hundred and eighty-nine million six hundred thousand odd bushels.

The CHAIRMAN. Where is it stored?

Mr. STONE. That is stored in various elevators all over the country.

The CHAIRMAN. Are they privately owned?

Mr. STONE. Some are privately owned and some are publicly

owned.

The CHAIRMAN. What proportion is stored in public warehouses and elevators?

Mr. STONE. I have not that proportion, but I can give you the exact location and number of bushels of each location if you would like to have that for the record.

The CHAIRMAN. I should like to have that for the record.

Mr. STONE. I will have a note made of that and have the information furnished.

Location of stabilization wheat as of October 1, 1931

The CHAIRMAN. What was the average price paid per bushel for all the wheat that has been acquired by the Grain Stabilization Corporation?

Mr. STONE. 81.97 cents per bushel.

The CHAIRMAN. Is that the average cost of the amount of wheat you have now stored in elevators and warehouses throughout the country?

Mr. STONE. That is the average cost of all the wheat acquired, but it is not the average price that it stands the Grain Stabilization Corporation now.

The CHAIRMAN. What amount of wheat are you selling?

Mr. STONE. On the average, 5,000,000 bushels a month, according to a statement which we issued on July 1. And then, in addition to that 5,000,000 bushels a month, the wheat which has been sold to foreign governments.

The CHAIRMAN. Is that 5,000,000 bushels of wheat going into the domestic market or into the foreign market?

Mr. STONE. Both.

The CHAIRMAN. In what proportions?

Mr. STONE. I do not know the exact proportions between the domestic and the foreign sales of wheat, but I can get that information for you, Mr. Chairman.

The CHAIRMAN. All right; please do so.

Grain Stabilization Corporation wheat sold in domestic markets and for export

Offsetting these sales, cash wheat and futures were purchased as follows:

The CHAIRMAN. What is the average price you are being paid to-day for the wheat that you are disposing of that is under the

control of the Grain Stabilization Corporation?

Mr. STONE. The price that prevails on the Chicago market.
The CHAIRMAN. What is that price as of to-day?

Mr. STONE. As of to-day?

The CHAIRMAN. Yes.

Mr. STONE. I have not seen the morning paper as yet.

The CHAIRMAN. Well, as of yesterday.

Mr. STONE. I think it is 58 and a fraction cents.

The CHAIRMAN. Fifty-eight and a fraction cents a bushel? Mr. STONE. No; that is too high. I think it is 55 and a fraction cents a bushel.

The CHAIRMAN. Is that Minnesota northern wheat?

Mr. STONE. No; that is just the Chicago price based on No. 1 or No. 2 hard wheat; I believe it is No. 2 hard wheat. That price varies in the different terminal markets.

The CHAIRMAN. What is the future policy of the board so far as you know and so far as it has been discussed with respect to the disposal of this wheat; whether you are going to turn it loose in foreign markets or in domestic markets, and if in both in what proportions?

Mr. STONE. We are under promise, according to a statement issued on July 1 of this year, not to sell more than an average of 5,000,000 bushels of wheat a month, and we reserve the right to sell to foreign governments.

The CHAIRMAN. In what quantities?

Mr. STONE. In any quantities. We have sold so far to foreign governments 47,500,000 bushels.

The CHAIRMAN. During what period of time?

Mr. STONE. Since July 1.

The CHAIRMAN. At what average price?

Mr. STONE. Each one of those sales was based on the Chicago price at the time of sale, with the exception of the sale which was made to China, and the price of that wheat is based on the day's price when the shipment is made.

The CHAIRMAN. Mr. Stone, can you give the committee the benefit of your knowledge regarding what would be the general average price of that wheat moved to foreign governments, or I mean to foreign countries?

Mr. STONE. I should say it would be an average so far of around 53 cents or 54 cents a bushel. I can not give you that price accurately, because of the price of the 15,000,000 bushels sold to China, which, as I have just told you, is based on the market price on the day of shipment, and of course, that market price varies.

The CHAIRMAN. If you limit the sales of wheat by the Farm Board, or the Grain Stabilization Corporation, to 5,000,000 bushels a month. and if you have no calls outside of the domestic market, it would run at least into 1934 before you would dispose of all of your present holdings of wheat, would it not?

Mr. STONE. Longer than that. You can divide the number of bushels we have with the rate of 5,000,000 bushels a month, and it will give you the exact time.

The CHAIRMAN. And that is the present policy of the Farm Board? Mr. STONE. No; that 5,000,000 bushels a month only goes up to the 1st of next July.

The CHAIRMAN. You have made no commitments beyond that time?

Mr. STONE. No.

The CHAIRMAN. Has the board adopted any viewpoint with respect to what it will do after that?

Mr. STONE. It has not.